How to Minimize Bank Account Fees

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Bloody Bank Fee MoneyBanks used to make their money by taking customer deposits and lending it out at a higher interest rate. Along the way, they discovered they could siphon off a little bit here or there in the form of “fees” cleverly disguised as “convenience” charges.

Bankrate does annual fee surveys of what banks charge and the fee amounts are absolutely astounding. Overdraft or nonsufficient funds (NSF) fees average $29.58, ATM surcharges average $2.22, and the average monthly service charge on a checking account is around $12.55. That adds up to billions of earnings for banks.

Let’s talk about how to minimize these fees.

This post is part of the Bargaineering Annual Financial Review week series where we take a closer look at the four major facets of personal finance and see if we can do better. This post is part of day one – getting the most out of banking relationships.

Shop Around

When you’re deciding which bank to use, ask them for their fee structure so you can compare them. While you never want to be dinged for a fee, if all other factors are equal, go with the bank with the lower fees. Many banks will now refund you ATM surcharges, even if it’s another bank’s ATM, and many offer accounts with no account service fee if you meet their requirements.

Be Responsible

Ultimately, all of these fees are only assessed when you do something wrong. Overdrafts aren’t little gremlins that strike when you least expect it, they strike when you spend more money than you have. Take steps to be more accountable, whether it’s using online tools or balancing your checkbook by hand, and you’ll see yourself hit with fewer, if any, fees.

Opt Out of Overdraft

Overdraft protection exists so that you can continue to spend even if you don’t have money in your account. Many banks are now letting you opt out of the protection system. The upside is that you won’t be charged overdraft fees if you do overdraw your account. The downside is that your checks will bounce and your debit card will be rejected, which may themselves come with fees.

Research ATM Locations

ATM surcharges are 100% avoidable with proper preparation. Before you go on a trip, try to locate ATMs that are within your bank’s network. One of the reasons why we still use Bank of America is because there are Bank of America ATMs everywhere. If you’re one of the lucky few who banks with a bank or credit union that refunds a certain number of surcharges a month, then you can use any ATM without fear or reprisal.

Ask for a Fee Refund

No one is perfect, as much as we’d all like to think we are. So from time to time, everyone gets dinged with an overdraft fee or an account maintenance fee we didn’t know about. A few years ago, I didn’t realize that I needed to have a minimum balance of $300 in my savings account or face an account fee at Bank of America. I keep almost all of our savings in high yield savings accounts, we only had the BoA one for convenience.

After being dinged with the fee, I called them up and asked to have it removed. I didn’t have to give a reason because it was my first fee since being a customer and they gladly refunded. A week later I closed the savings account because it was redundant.

The key with asking for a refund is being polite and then, should they refuse, politely remind them that, while you enjoyed their service, you could go anywhere. Always be courteous because the person you’re talking to is a human being, just doing their job (with the ability to help you out), and don’t take your anger out on them. It never helps.

Are there techniques you use to avoid the various banking fees that I missed?

(Photo: colinbrown)

{ 24 comments, please add your thoughts now! }

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24 Responses to “How to Minimize Bank Account Fees”

  1. My bank is a member of Shazam’s “Priveleged Status” network. Basically, all of the banks within the network refrain from charging ATM fees to customers of all other banks in the network.

  2. The overdraft protection deal is a bad one for fees, and it encourages you to write checks on money that isn’t there. Banks love those type of loans, because they make such a good profit on them, and they are short in term.

    John DeFlumeri Jr

  3. I’ve been looking at this issue. It seems that Congress has started to take a look at what’s going on, from what I’ve read.

  4. aua868s says:

    I love the “Be Responsible” point…everything starts from self….got to learn and understand that..

  5. dmeanea says:

    Overdraft is another area where ING really shines. You can set it up to notify you immediately when the overdraft protection is used. Then you can go in and transfer funds to cover the overdraft; I think if you do that the same day then you don’t pay any interest. Since I have automatic payments coming out of my ING checking account, the overdraft is great for my peace of mind, not having to worry about fees if I neglect to get funds moved into checking in time.

  6. hoht says:


    that is an awesome picture, I thought it was blood at first then I zoomed in for a closer look and it turns out the 20’s are covered in red dye.

  7. lostAnnfound says:

    Our CU belong to the SUM network, so if we do any withdrawals from another CU that also belongs to SUM there are no fees.

    Also, the “being responsible” part is important in avoiding any fees or overdrafts. Know your balances and what you have available before you spend.

  8. zapeta says:

    I think the best technique to avoid fees is to be responsible. If you do have a fee, always call and ask for them to reverse the fee.

    Another tactic that I used to avoid overdraft fees was to make a deposit of some small amount, maybe $100 or so and not add it to my check register. If I accidentally had an overdraft of a small amount it would be covered by the money that I didn’t think was there. It’s sort of like having your own overdraft protection and would allow you to opt out of their expensive overdraft protection.

  9. BrianC says:

    Be on the lookout for account changes. I just closed a Citi checking account that will no longer waive the monthly fee with direct deposit (though it can still be waived if I keep $1500 in the account–not worth it for me).

  10. One extra tip on avoiding ATM fees: If you choose a bank or credit union that reimburses you for fees, you’ll be taxed on total reimbursements. For that reason, it may be better to find a bank that has the most ATMs (as this post also advises).

    Laurie McLachlan

  11. Izalot says:

    I agree with reducing ATM fees, but I’m also flabbergasted with people who go to the ATM to take out only $20. If an out of network ATM charges you just $1 you are already 5% in the hole! If you must get hit with an ATM fee try to get the lowest percentage hit possible. If you want only a small amount of money go to a local supermarket/drugstore and make a small purchase and take cash back.

  12. I have overdrafted my account several times on accident and have been able to have the fees dropped each time. As long as you are not constantly overdrawing your account, it’s worth trying to get it removed.

  13. Edwin says:

    I’ve overdrawn on accident a few times (one was 4 in a row, brutal) and they refused to charge it back. This was at Zions Bank

  14. This sounds like a strong argument for chosing a bank based on the number of ATM locations they have. That means mega banks!

    An alternative might be to make periodic cash withdrawls for larger amounts, ie, $100 for the week, or $400 for the month, rather than relying on $20 and $40 withdrawls on an as needed basis where ever you happen to be. At $2-3 per withdrawl, that’s too much to pay for the priviledge of using your own money.

    • Shock says:

      ATMs aren’t just for withdrawals. Mega bank ATMs allow for deposits too. If you get a rebate or gift check, depositing it via ATM is the most convenient option.

  15. mikestreb says:

    My debit card gets torn up in my wallet. It finally began to crack, so I emailed my bank to have them send a new one. They tried to squeeze a $5 ‘new card fee’ out of me.

    Here is a screenshot of the back and forth…

  16. Anonymous says:

    I am hoping someone might have some type of answer…


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